Soya rallies to record high

US soyabeans rallied to a record high on Wednesday on fears that the worst drought in 56 years, which has devastated the corn crop, will now turn on soyabeans as forecasts called for continued hot and dry weather. Corn extended gains to within striking distance of a record $8 per bushel, adding 2 percent to a 50-percent summer rally to a 13-month high stoked by the worsening drought that is expanding to the north and west.
Wheat futures were buoyed by the gains to the highest level in nearly 4 years. "Now, it's soyabeans' turn. The next two weeks will be critical for them. There is a chance for catastrophic problems in soyabeans. It's waiting for its turn at moisture and so far it's been uh-oh, there's been no change in the weather forecast," said grains analyst Don Roose of US Commodities.
Chicago Board of Trade spot August soyabeans rose 2.7 percent to an all-time high of $16.85-1/2 a bushel, surpassing the previous record of $16.79-1.2 set just last week. New-crop November rose 2 percent to $16.48 per bushel. Spot September corn rose 2 percent to $7.95, near a 13-month high of 7.96-1/2 a bushel on Tuesday and close to the record high of $7.99-3/4 set last summer. New-crop December was up 1.7 percent at $7.84-1/4 a bushel.
Soyameal futures hit an all-time high of $514 per ton as feed supplies in the United States continued to erode with the shrinking corn crop. Supplies of the alternative feed distillers dried grain have also tumbled with the slowing of ethanol production on the back of high corn prices. "The soyameal basis has gone up $7 (per ton) in a week," said grains analyst Charlie Sernatinger at ABN Amro in Chicago.
The surge in the soya complex, in addition to corn, will continue to cut into margins for meat companies like Smithfield Foods, Tyson Foods and others, and ethanol producers who are already cutting back output. Chicago Board of Trade wheat and headed higher in tandem with corn and soyabeans. It also was supported by drought in parts of Kazakhstan and Russia and by rain delays to the harvest in France. The United States is the world's top exporter of corn, soyabeans and wheat. September wheat rose 2 percent to $9.03-1/4 a bushel, off the session high of $9.08-1.2, the highest in nearly 4 years.